Monday, Oct 03, 2022

India Swiftly Came To Rescue Of Crisis-Hit Sri Lanka: USAID Administrator Samantha Power

Senior US official Samantha Power said the Joe Biden administration and the Indian government are ‘deeply concerned’ by the economic collapse and crisis that has befallen the Sri Lankan people.

Sri Lanka is facing worst economic crisis.(File photo-Representational image) Photo: AP/Eranga Jayawardena

India reacted "really swiftly" with an absolutely critical set of measures to help Sri Lanka tide over its economic crisis, but calls to Beijing for significant relief have gone unanswered, visiting USAID administrator Samantha Power said on Wednesday.

In an address at an event in Delhi IIT, Power said China became one of Sri Lanka's "biggest creditors" offering often "opaque loan" deals at higher interest rates than other lenders and wondered whether Beijing would restructure the debt to help the island nation.

At a media briefing later, the senior US official said described as "absolutely invaluable" the USD 3.5 billion Lines of Credit that the Indian government have provided to Colombo. 

Power said the Biden administration and the Indian government are "deeply concerned" by the economic collapse and crisis that has befallen the Sri Lankan people. 

In a reference to impact of Chinese loans, she said the "price" of receiving them carries with it "profound infringements" on one's own "sovereignty and independence" besides the very significant interest rates.

Power is on a visit to India from July 25 to 27. The US Agency for International Development (USAID) is one of the leading aid agencies globally.

"India has reacted really swiftly with an absolutely critical set of measures," she said. 

"The government of India has already supplied USD 16 million in humanitarian aid to Sri Lanka, it has exported 100,000 tons of organic fertilizer to try to help farmers stave off future food shortages, and it has supplied USD 3.5 billion in lines of credits to the government of Sri Lanka as it attempts to steer its economy out of default and further collapse," she added.

Power contrasted India's assistance to that of China.

"Contrast this with the People's Republic of China, which has been an increasingly eager creditor of Sri Lankan governments since the mid-2000s. Indeed, over the past two decades, China became one of Sri Lanka's biggest creditors, offering often opaque loan deals at higher interest rates than other lenders," she said.

Power also referred to China financing a raft of "headline-grabbing" infrastructure projects with often questionable practical use for Sri Lankans -- including a massive port that generated little income and was barely used by ships, an equally massive airport dubbed the "emptiest" in the world because it attracted so few passengers.

"Now that economic conditions have soured, Beijing has promised lines of credit and emergency loans - this is critical since Beijing is estimated to hold at least 15 percent of Sri Lanka's foreign debt," she said. 

"But calls to provide more significant relief have so far gone unanswered, and the biggest question of all is whether Beijing will restructure debt to the same extent as other bilateral creditors," she added. 

Power said India has helped countries around the world in times of difficulties.

"For seven decades now, India's legacy of support and cooperation has grown and strengthened into a commitment this past year of USD 2.3 billion in bilateral development assistance, stretching from East Asia all the way to Latin America," she said. 

"And while the majority of its focus has been on supporting neighbouring states, India has never looked away from its partners in Africa," she noted.

In her interaction with the media, Power suggested that the US has been engaged in sustained high-level dialogue with India about how best to support the Sri Lankan people.

Power said the humanitarian assistance and the developmental assistance that the USAID and the US government is flooding in performs a vital role. 

"Fundamentally, it is also incredibly important that Sri Lanka's creditors come to the table, all who are involved in those roles, and it is important that the Sri Lankan government itself course corrects on so many of the economic and political decisions that had been made in recent years that have contributed to this crisis," she said.

"In terms of Beijing, just want to be very clear, she said adding "the crisis stems from a whole host of factors, everything from financial mismanagement by the prior government, corruption, some unwise agricultural policy decisions."

She said the Covid crisis and the terrorist attacks that occurred in Sri Lanka drove away foreign tourists. 

(With PTI inputs)